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Nonprofit sector and the market economy

1. Respond to the following in 3-4 paragraphs

What role(s) should the nonprofit sector play in a market economy; should nonprofits be entrepreneurial; should nonprofits compete with for-profit businesses? Should there be special "set asides" for nonprofit organizations; is "cause-related marketing" a good idea or just a marketing ploy; and, should business strategy be tied to philanthropy? What is your informed opinion (i.e. you need to back up our thoughts with some information, data, and/or references to other thinkers)? Comment on these and other questions of your own choosing.

2. Then respond to the following post adding incite, desputing and or supporting with additional information in 1-2 paragraphs:

Anheier describes, "the majority of available theories of nonprofit organizations are economic in nature, i.e. they involve some notion of utility maximization and rational choice behavior" (p. 155). This is broken down by many terms, an important one being pure public goods which are "goods to which no property rights can be established and which are available to all irrespective of contribution" (p. 117). The role that the nonprofit sector plays in the market economy is to provide these pure public goods, whereas the markets provide pure private goods. Pure private goods are "goods with individual property rights, and their productions, exchange, and consumption generates no externalities" (p. 117). There is a need to have the balance between the nonprofit sector and the economic market to avoid free-rider problems, off set high transaction costs, and market failure.

I do believe that nonprofits, while built to offer public goods to the community that are not offered in the public sector, still need to have a business plan tied to the philanthropic mission to be efficiently operated. A well-structured plan for a nonprofit will lead to a better future with more structured volunteerism, leadership, and commitment to the mission served. Cause marketing is a strong way to make your mission a "house-hold" name and it is an easy way for people to support the cause within their everyday lives. So while in many cases, cause marketing can be argued to be a marketing ploy, I think that it overall is best for all parties involved by its outcomes.

3. Then read the following 2 papers (they are attached) and comment on them telling what you liked, disliked, would challenge, agree with, and/or found interesting in 1-2 paragraphs.


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1. Non-profit should play an important role in the development of the society by focusing on those issues and areas that are either not served by government and private companies or are highly under served and need more attention and focus. Non-profits can fill such gaps by leveraging on the resources, be it financial, human or other types of resources, to work in a focused manner on such issues and areas.

Non-profits are not competitors of for-profit businesses. Rather, they serve areas that have been neglected by for-profits or not given due attention by them. I think that there should be special "set asides" for non-profits in order to encourage and motivate them to achieve their goals.

I think cause related marketing is a fantastic idea to ...